China's ZTE slams US ban, says its survival now at risk

HONG KONG • China's ZTE Corp said a United States ban on the sale of parts and software to the company was unfair and threatens its survival, and vowed to safeguard its interests through all legal means.

Earlier this week, the US imposed a ban on sales by American companies to ZTE for seven years, saying the Chinese telecom equipment maker had broken a settlement agreement with repeated false statements - a move that threatens to cut off its supply chain.

"It is unacceptable that BIS insists on unfairly imposing the most severe penalty on ZTE, even before the completion of investigation of facts," ZTE said yesterday in its first response since the ban was announced, referring to the US Commerce Department's Bureau of Industry and Security.

"The Denial Order will not only severely impact the survival and development of ZTE, but will also cause damages to all partners of ZTE, including a large number of US companies," ZTE said in a statement.

ZTE said it regards compliance as the cornerstone of its strategy, adding that it invested US$50 million (S$68 million) in export control compliance projects last year and has plans to invest more this year.

A senior US Commerce Department official said earlier this week that it is unlikely to lift the ban.

The Commerce Department has an appeals process for companies to try to get off the list.

But it is unclear whether that would be available to ZTE because the case had previously been subject to a settlement, according to people familiar with the matter.

Even so, ZTE would have little recourse in the near term because appeals would have to be approved by the BIS, the same agency that issued the ban.

REUTERS

A version of this article appeared in the print edition of The Straits Times on April 21, 2018, with the headline 'China's ZTE slams US ban, says its survival now at risk'. Print Edition | Subscribe